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What just happened? President Joe Biden put his signature on a bill this week that will allow semiconductor manufacturing projects funded by the CHIPS Act to skirt certain environmental regulations. The new law exempts them from lengthy environmental impact reviews under the National Environmental Policy Act (NEPA), greasing the wheels for these major construction projects to get off the ground faster.
The official line from the White House confirmed that Biden had signed the bill into law sans any other commentary. But the implications are pretty clear: this opens the door for a speedier build-out of cutting-edge chip plants across the nation.
For new semiconductor fabs to be exempt, they are required to meet one of three conditions: The project kicks off construction by December 31, 2024; the federal funding comes in the form of a loan/loan guarantee; or said funding accounts for no more than 10% of the total project cost.
In essence, these new fabs have a narrow window to start construction this year and can only accept federal loans up to a certain threshold to qualify for the NEPA exemption. How that plays out in practice remains to be seen. Still, proponents of the bill argue that it will enable rapid expansion of semiconductor production alongside industries like renewable energy.
However, critics have cried foul, saying it muzzles communities' ability to scrutinize environmental and health hazards – things like toxic chemical leaks – that often accompany such heavy industry. A coalition of green groups had urged Biden to veto the bill, highlighting risks from substances like PFAS (per- and polyfluoroalkyl) that don't break down and have been linked to various cancers.
As the Sierra Club's legislative affairs lead Harry Manin put it in a written statement, "This bill would remove the last remaining federal lever to assess the impact of massive semiconductor fabs on drinking water, air quality, climate change, and community health."
Despite the pushback, the bill sailed through the Senate late last year, though it met stronger resistance in the House, passing with a 257-125 vote amid opposition from top Democrats who questioned exempting fabs from environmental checks.
Backers, however, tout the necessity of ramping up semiconductor production as a matter of technological and economic competitiveness, especially after the $280 billion CHIPS and Science Act set aside serious funds for revamping the domestic chip industry.
Just like the Act, the bill comes as a result of the economic and national security issues caused by the death of US semiconductor manufacturing, which has almost entirely moved to other countries over the past few decades.